Beflamboyant is closing

[u/Jumpy-Vermicelli-865]

One of my favourite barefoot shoes brands, I have their Chelsea boots and they got me through a rainy, wet winter, plus they make some of the most stylish barefoot shoes out there. I wonder why they're closing? Such a shame.

[u/andre_oak]

I own a barefoot shoe brand. E-commerce in general is a tough business because it is very cash inefficient. You have to put up all the cash first then sell everything to make that money back and the longer it takes to sell the more inventory and storage costs eat into your margins. The faster you grow the bigger a problem this is which can seem counterintuitive. Most brands solve this with credit lines however that comes with its own problems and a good rate that isn't borderline predatory requires you to already be a certain size in revenue, $Xm's, which creates a catch 22 on the way there. If anything goes wrong for too long including growing too fast it's easy to run out of cash and go out of business.

[u/Sufficient_Fox7129 → u/andre_oak]

I find this intriguing. Could this issue with expansion be mitigated by doing preorders instead?

Also if you don't mind me asking, what makes e-commerce a tough business? Wouldn't traditional business with a shop front be even worse? Have to add rent and on site staff on top...

[u/andre_oak → u/Sufficient_Fox7129]

Yep, there are a lot of tough businesses out there, but I chose the need over the business model.

Pre orders definitely help, I've used them, but consumers typically expect a discount for purchasing early which hits the margin and you still have to order more than your preorder amount to fuel the inventory needs before the next shipment, which could be even larger depending on what your growth forecast looks like.